Warburg-backed Princeton enters South Korea with first data centre

[BENGALURU] Princeton Digital Group (PDG), a data centre operator in Asia backed by Warburg Pincus, plans to invest US$700 million in its first South Korean campus to power artificial intelligence (AI) development in the country.

PDG wants the initial 48-megawatt data centre in Incheon to grow to 500 megawatts across several locations, chairman and chief executive officer Rangu Salgame said. It has secured energy supply and will break ground on construction this month before it eventually comes online in early 2028, he said.

Asia is trying to keep pace with US technology giants and AI companies that have committed to spend hundreds of billions of US dollars on data centres. Countries such as Japan, India and South Korea are looking to build their own large language models, meet data sovereignty requirements, and boost enterprise usage in a region that’s considered strategic for the growth of AI.

PDG will spend US$25 billion to boost its total capacity to more than four gigawatts over the next five years, up from its current level of 1.3 gigawatts, Salgame said. The company is slated to invest US$6 billion in South Korea by the end of the decade, he added.

The company already has operations in Singapore, Japan, India, Indonesia, China and Malaysia. It’s backed by investors including Ontario Teachers’ Pension Plan, United Arab Emirates sovereign fund Mubadala Investment Co. and New York’s Stonepeak Partners.

“While the US is seeing AI data centre expansion at breakneck speed, the big wave in Asia will be in the next five years,” said Salgame, adding that the overall capacity of the Asia-Pacific region is expected to triple to 40 gigawatts by the end of the decade, off the back of US$300 billion of investment.

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South Korea is a complex market for data centre operators as land constraints, grid limitations and stringent permit requirements slow development. But the government is seeking to promote emerging AI technology, which requires massive amounts of computing power, by pledging large investments and policy priority.

Seoul’s push has led some of the biggest names in tech to step up their presence in the country. OpenAI set up its first Korean office this year following a surge in demand for its ChatGPT service in a market that’s second only to the US in terms of paying subscribers. The San Francisco-based company will work with Korea’s tech giants, including Samsung Electronics Co. to build data centres.

Meanwhile, Amazon.com announced in October that it will invest a further US$5 billion in South Korea data centres, adding to the US$4 billion pledged earlier this year. BLOOMBERG